Monday, May 23, 2011

Let’s hope he's wrong. Columnist David Goldman, aka Spengler, recently reported on Egypt’s economic collapse, and how the situation seems to be leading the Egyptian people toward starvation. Link here.Those who thrilled to see people power on the march in Tahrir Square a few months ago, should revise their youthful idealism.Spengler offers some useful information about the current situation in Egypt, especially as it involves food distribution: “The Ministry of Solidarity and Social Justice is already forming ‘revolutionary committees’ to mete out street justice to bakeries, propane dealers and street vendors who ‘charge more than the price prescribed by law’, the Federation of Egyptian Radio and Television reported on May 3.”The consequences are predictable: “Once the government relies on young men with guns to police its merchants, hoarding will only get worse. The Egyptian revolution has cracked down on the commercial elite that ran the country's economy for the past 60 years, and the elite will find ways to transfer as much of its wealth to safety as it can. The normal chain of distribution will break down and "revolutionary committees" will take control of increasingly scarce supplies. Farmers won't get fuel and fertilizer, and domestic supplies will fail.”He concludes: “It will look like the Latin American banana republics, but without the bananas. That is not meant in jest: few people actually starved to death in the Latin inflations. Egypt, which imports half its wheat and a great deal of the rest of its food, will actually starve.”As I say, let’s hope he’s wrong. But even if he is wrong, the situation in Egypt is dire and likely to get worse. Keep in mind that tourism was one of Egypt’s biggest industries and now it has all but vanished.